Contract and Rate
Management

How To Create a Rule 11 Shipment

Rule 11 is the rail industry regulation governing interline shipments
with one tender and multiple service provider invoices. In a Rule 11 shipment,
the customer tenders the shipment to an originating rail carrier on a
through bill of lading, and each of the carriers submit invoices for their
work. Depending on the terms of the contract, the shipper receives the
invoices or one of the invoices is sent to the consignee.

Without Rule 11, interline rail shipments usually result in a single
customer invoice, issued by the originating carrier for prepayments and
by the terminating carrier for collect payments. Then the carriers invoice
one another.

In OTM, Rule 11 shipments consist of two legs and two rail carriers.
Separate shipments are created for each leg, which are cross-referenced
by a Rule 11 route code. The shipment built from the first leg is the
operational shipment and is tendered when shipment actuals
are entered. The shipment built from the second leg is for settlement
only and is not tendered.

If one of the legs of a Rule
11 shipment contains a through rate, you can use Rule 11 in an interline
shipment with three rail carriers.

Steps

In the Location
Manager, enter or select the origin, destination, and junction
location
for the Rule 11 shipment. The rail junction location is needed so that
rates can be made that break at the junction.

In the Rate Manager,
enter a rate
for each leg of the shipment. Each leg must have its own rate. The rate
record must have a route
code that covers only that leg. Rate
Service IDs and Rate
Service Types should be entered for each lane defined in the rate
record.

In the Itinerary
Manager, create an itinerary that uses the two legs.
You can make the itinerary as generic as possible to accommodate multiple
rates.

In Rates and
Codes, make sure that each leg of the Rule 11 shipment, and the
shipment as a whole, have rail
route codes.

First, enter one route code from the origin to the junction and another
from the junction to the destination. Then select a Rule
11 route code that references to the route codes of the two legs of
the shipment.

The Rule 11 route code must
first be saved as a regular rail route code.

In the Material
Manager, specify the items
or commodities
for the shipment. Most rail rates are based on commodities.

If needed, in the Equipment
Manager specify the equipment type and equipment group for
the shipment. Most rail rates are based on equipment type.

For Rule 11 shipments built in
OTM, the entire set of shipments has the same BM reference value which
is derived from the tendered shipment (first one). This is necessary for
matching incoming invoices for settlement (only first shipment is tendered
to the first rail carrier but all shipments go through settlement). If
the same reference number is present on all shipments, then matching can
be performed based on the reference number and the service provider ID
which is the true business solution based on Railroad EDI standards.